SILVER CITY, N.M. - Black Canyon is a place that only a hard-core stream addict should be able to love, so barren are its edges, so sparse its grasses.

Superficially, the canyon offers a park-like atmosphere in America's first wilderness. The stream runs freely over its shallow bed, and a few 75- to 100-foot-tall cottonwoods provide shelter from the sun.

But a crucial element is missing. The aging willows are the last of their kind in this canyon. There are no young trees.

"It's not beautiful - it's dying," says Susan Schock. "The young trees aren't (regenerating). When the old trees die in 10 to 20 years, it will be gone."

For more than two years, this canyon and a half-dozen more like it on one of the Southwest's biggest cattle operations have been a passion for Schock and a few hundred supporters. A rancher's granddaughter and Tucson, Ariz., native who moved to Silver City in 1990 to escape the city life, Schock runs a group called Gila Watch. It has fought both a fourth-generation rancher and a federal agency to a standstill over the fate of this wilderness.

Black Canyon is straddled by the Diamond Bar grazing allotment that blankets much of the Gila and Aldo Leopold wildernesses. The fate of the canyon and the allotment have turned a once-peaceful town tense and fearful.

Silver City, long a sleepy mining town of 11,000, seems poised to join Moab as a "new Western" town. Newcomers from California and Seattle are jacking up the prices of century-old brick houses. They're adding galleries, espresso bars and gourmet restaurants to the town's cowboy bars and thrift shops.

A mixed culture of ranchers, Hispanic copper miners, New Agers, business people and aging hippies, the town has started appearing in books listing the country's best small towns and retirement communities - a prescription for rapid change.

Right now, the town is knee-deep in culture clashes. Boycotts, a firing, censorship, threats of violence, radio ads attacking environmentalists as "pagan nature worshippers' and hate-filled letters to the editor have all been part of the anti-environmentalist agenda.

But to Schock and her supporters around the country, the Diamond Bar is worth the fight because it underscores all that's wrong with Forest Service management of cows in a wilderness.

To let a rancher keep making loan payments to the bank, and to buy time for the Forest Service to make decisions, the Black Canyon was grazed to the bone. Numerous other canyons and streams on the Diamond Bar are as bad off, or worse, with many having no water at all anymore.

Lying 65 miles northeast of Silver City by car, the Diamond Bar allotment is a seemingly endless series of steep, rocky and juniper-topped ridges and canyons climbing 4,000 feet through the wilderness to the 10,000-foot-high Continental Divide. At 227 square miles, it's the biggest Forest Service grazing allotment in the Southwest. It's also remote, lying two hours of rutted, car-killing dirt roads from the nearest paved highway.

Schock, 41, with medium brown hair dipping past her shoulders, is hardly a yuppie. Gila Watch gets less than $10,000 annually in foundation grants. Her friend and colleague Michael Sauber pays the phone bills with income from his backpacking-bike shop. But she has been one of the engines driving the tension.

Working from a computer and telephone in her dining room, she has dashed out scores of memos and letters, press releases, newsletters and articles about the Diamond Bar and sent them around the country. She has battered federal agencies with Freedom of Information Act requests and brought in technical experts to study the stream damage first-hand. She, Sauber and other Gila Watchers have backpacked up to 20 miles in the wilderness, to monitor streams and find trespassing cattle.

Working with The Wilderness Society, the National Wildlife Federation and other environmental groups, Gila Watch has successfully pressured the Forest Service to delay approving dozens of new livestock tanks in the wilderness and to conduct a full environmental impact study. Last fall, the agency proposed cutting the rancher's permitted cattle numbers by nearly 30 percent.

Gila Watch is not alone. The Greater Gila Biodiversity Project is making its own waves. Using the law as its club, that group's biologists - serious, intense activists who used to survey spotted owls for the Forest Service - are prodding the federal government into protecting endangered and threatened birds and fish. Their battleground is the entire Gila River ecosystem, covering much of southwest New Mexico and southeast Arizona and encompassing more ground than Maryland and Delaware combined.

Ranchers and their allies worry that the Diamond Bar cutbacks could put them out of a living. Working with mining interests, hunters, off-road vehicle fans and others, they pack local meetings and paint environmentalists as extremists.

The ugliest message came last fall from Robert Anderson, a retired postal worker. His letter to the Silver City Daily Press blasted "eco-pornographers' and suggested poisoning threatened fish species.

"Perhaps to enrich the water in the Gila River, we might utilize some heavy wire and a few large, heavy rocks," Anderson wrote. "We could attach the wire securely to the rocks on one end. The other end could be attached securely, very securely, to the arm, leg or other body extremity of an eco-pornographer. Deposit all three objects in one of the deep pools in the river and presto! Or adios or something."

Many in Silver City say Anderson has plenty of sympathizers. "I could see where his mind was at - get rid of the damned things, the fish," said John Fowler, a rancher, sawmill operator and former president of the local People For The West! chapter. "I'm not willing to compromise anymore. I'm not saying we should do what he says, but I know where his frustration comes from."

Last fall, rancher and miner pressure cost a prestigious local bike race key sponsors. Until recently, the five-day, 340-mile springtime event had been named the Scott Nichols Tour of the Gila, after a local auto dealer who had donated $50,000 over seven years.

But Nichols backed out after ranchers, miners and other customers started grousing about one of the tour's leading lights: Sauber, the lanky bike shop owner. Elf-like, with a long white beard, Sauber co-sponsored the race - and helped found Gila Watch.

"It doesn't matter what I feel about it. It only matters what my customers feel about it," Nichols said a few months later. "In a small town, a small business, if you're trying to lead a crusade and maintain a business, you are not going to succeed."

The town's ugliness makes Schock feel as if she lives in the South during the George Wallace-Bull Connor era of the early 1960s.

For years, she says, ranchers got their way, dominating the Forest Service and holding down any pressure to restrict grazing.

Sue Kozacek would put it another way: "(Ranchers') grandparents were born here," says the Forest Service ranger in the Mimbres District northeast of Silver City. "They don't have a lot of experience with things outside them. When you get in that situation, you don't see the big picture."

Cows and the Old West still dominate the local culture. Elementary school kids join a program in which teachers borrow money from local banks to buy a cow at auction, and the children learn to raise and brand it. In 1992, an elementary school gave away a .30-06 Savage rifle as a raffle prize to raise money for playground improvements.

Slowly, however, the Forest Service has started paying more attention to the newcomers. With endangered fish and birds hanging over the agency's head, it will come under even more pressure in the future to move cows away from river bottoms. The agency's solution is likely to be a game of musical cows. It wants to free streamsides of cows by bulldozing earthen stock tanks and pipelines at public expense.

Schock and other environmentalists are fighting those measures, arguing that they aren't worth the cost and can bring their own environmental damage. This has brought even more bitterness from the old-timers.

"The environmentalists just moved in here, they haven't lived here, they haven't made their living here," said Jim Shelley, a rancher whose plan to move cows from the Gila River was blocked last fall by Schock because the plan would have cost taxpayers tens of thousands of dollars to build public improvements. "I have trouble believing they have this county at heart."

Shelley predicts that his side will eventually triumph, once the general public realizes that "extremists' want ranchers put out to pasture. But some ranchers aren't taking chances. Hugh Mc-Keen, a rancher and commissioner in neighboring Catron County, says many ranchers he knows are buying guns and ammunition.

"These people have fought for this land at one time. There have been killings over water. It runs in the genes," McKeen said. "You have very independent people here. They want to be left alone, but their government oppresses them and the environmentalists come in here and want to oppress their life."

Not every rancher in this forest can trace his Southwest New Mexico roots to the 19th century. Nearly 30 percent of the Gila forest's 130-odd ranching permittees are from out of town or out of state, Forest Service records show.

Kit and Sherry Laney, who run the Diamond Bar, are fourth-generation Catron County ranchers who say their way of life is threatened.

Kit is built like a football halfback at 5-feet-11-inches and 195 pounds. His dark hair is cropped almost military short. While Susan Schock's blue Honda Civic has a bumper sticker saying, "Stop Public Lands Ranching," Laney's pickup truck has a sticker saying, "Hungry and Out of Work? Eat an Environmentalist."

Just as Schock complains that many environmentalists are mealy-mouthed, Laney says he considers a lot of ranchers too wimpy "in not telling the government to go to hell."

Now the Laneys are prepared to say just that. Last fall, the federal agency issued a draft environmental impact statement proposing to slash the Laneys' permitted cattle numbers from 1,188 to 600-800 per year.

Earlier plans to bulldoze into the wilderness up to 37 livestock watering tanks, each holding as much water as a family uses at home in a year, would be scaled back to 20 tanks. More than 40 percent of the allotment would be closed to grazing.

Once the Forest Service makes a decision on the Diamond Bar, both environmentalists and ranchers plan to take it to court. Environmentalists contend that even one tank in the wilderness is too many and that any new water impoundments are precedent-setting.

Laney is bitter because eight years ago he bought the Diamond Bar's grazing permit only because the Forest Service had signed a memorandum with the previous owner, a Texas bank, giving the rancher the right to run 1,188 head a year and build stock tanks. At the time, he said, Forest Service officials told him the agreement was as "good as gold."

Today, no Forest Service official will admit to having said "good as gold." Agency officials say the 1984 agreement made it clear that they can raise or lower cattle numbers when conditions warrant. One top forest official, however, said the agency may have to buy Laney out to avoid a legal mess.

Garry Engel, the district ranger for the Diamond Bar, says, "I really feel bad about the whole thing. We thought that memorandum was something we could accomplish. It was something we signed in good faith."

He contended the current Forest Service proposal would keep cattle away from the most sensitive streams, and allow cows to graze in areas already heavy on fences and stock ponds and light on non-hunting recreational uses.

But Laney, who ran 960 cows last year, says he cannot survive on 600 to 800 cows. He says he wants to protect the Diamond Bar's streams and rivers, but can't do it until the federal government lets him build his stock tanks to get the cows onto higher ground.

"This business is ingrained, it's a part of you, and somebody comes and takes that away from you. They might as well take your life," Laney said.

For the Laneys, ranching in an isolated wilderness has meant sacrifice. They herd cows on horseback. They haul fenceposts by mule-drawn wagon. Power lines stop five miles away, so propane gas lights their lamps and refrigerates their food. They said they buy no canned goods, make cheese, milk and butter at home, can jelly from home-grown grapes and berries and trade cows' milk to a neighbor for vegetables.

As she munched freeze-dried enchiladas while hiking up a Diamond Bar streambank, Schock tried to explain why she has no sympathy for ranchers.

Before she left Tucson, she barely escaped repossession of her home when the Federal Housing Administration refused to refinance her mortgage. Divorced, in school and raising a child alone, she fell behind on her payments. FHA refused her because it didn't believe her employment prospects were good.

"I had to change," Schock said. "Laney made a bad, stupid deal. How many people in America suffer because they made bad decisions?"

Family history also shapes her views. In 1913, her grandfather Raymond Schock homesteaded a ranch in southeast Arizona. As late as the 1950s, the ranch was grand enough to grace the cover of Arizona Highways. The cover picture could have come out of a Western movie, with a windmill standing in the background, grasses springing skyward, and huge, cumulus clouds hanging overhead.

Her father would take her on hikes across that ranch, show her mesquite and yucca invading the land and tell how drought and grazing were rubbing out native grasses.

Schock calls Laney a "land abuser." Looking up Main Diamond Creek, a dry, gravel streambed, she shook her head and said, "Wasteland." According to Schock's advisor, Arizona State University Professor Robert Ohmart, this should be a narrow, deep, year-round stream, lined by a thicket of cottonwoods and willows.

Instead, the stream trickled back and forth in a 30-foot-wide channel, the two-foot-deep banks were collapsing and the south bank was bare. The north bank was lined with chamisa, which often invades after cattle have eaten the streamside vegetation and barren banks cave in.

Yet last year, Laney won an award for excellence from the New Mexico chapter of the Society for Range Management.

The society noted that federal studies found that good quality forage had risen nearly by one-third since the Laneys took over, bare soil had dropped 7 percent, and 81 percent of the allotment was improving or stable. It didn't say if the "stable" land was in good or bad shape. The range award also didn't say, however, that the Forest Service's studies show that the amount of rock found on the Diamond Bar doubled and the amount of vegetation and leaves and other litter dropped slightly from 1979 to 1992.

To Laney, streamside grasses and trees are like savings in a bank, to be used only when necessary.

"If the ranch really gets dry, you can kick the cows out there and do damned good on it for a short time," he said.

Asked, then, why his cows keep grazing the Diamond Bar's streambanks, Laney replied, "You've gotta pay the bank. If they want to say I'm an abuser, I only abuse to the extent the federal government gives me no alternative."

The Diamond Bar is not just a story about cows and stock tanks. It's about banks and how financial pressures can affect federal decisions.

A decade ago, the Forest Service wanted to slash the Diamond Bar's cattle numbers to 800 or so. The previous operator had gone bankrupt and the grazing permit belonged to a Texas bank. The last serious operator, John Donaldson, had voluntarily cut his legal cattle limit in the 1960s from 2,000 to 1,200 and ran 500 to 600 yearly.

"The ranch had been overgrazed and I was trying to bring it back," recalled Donaldson, who left in 1973 and now ranches near Sonoita, Ariz. "The bottoms were eaten out."

Ten years and two less-attentive ranchers later, the Forest Service said in a report that the range's condition was mostly poor or very poor. The cows themselves were in poor or very poor shape during dry seasons, the report said.

But the prospect of livestock cuts made the Texas bank that held the grazing permit go ballistic. James Lewis, vice president of the Federal Intermediate Credit Bank, told Forest Service officials that he was "jolted." He warned that the cuts could slash the Diamond Bar's value by $500,000.

Then, the Range Improvement Task Force, a group of New Mexico State University scientists, re-examined the documents at the bank's request. It and the Forest Service concluded that the negative reports had errors. In 1984, the bank and Forest Service signed the now-controversial memo jacking up cow numbers and allowing stock tanks - without conducting studies of the environmental effects.

Today, it's hard to prove what the land's condition was back then. The agency doesn't have some key range data from the 1970s and is missing inspection reports from 1981 and the middle 1980s. The agency's 1992 study found that the range was largely in fair condition. But the study failed to look at riparian areas or at land that was being grazed at the time.

Kit and Sherry Laney were in their mid-20s when they bought the Diamond Bar in December 1985. To buy the ranch, the Laneys put together $310,000 from their and their relatives' holdings, local court records show, and took out a $560,000 mortgage from the Texas bank.

The 1984 memorandum's effects are still lingering. Critics now charge that because the memo's high cattle numbers enhanced the ranch's value and loan mortgage payments, the government is under fierce pressure not to reduce cattle numbers and keep the Laneys from going bust.

Yet today, Laney says that one reason he bought the grazing permit was that it was cheap, compared to most other allotments, largely because 90 percent of it lay in wilderness.

His Mormon family had been ranching in Utah before moving to nearby Luna, N.M., in 1883, at the church's direction. Sherry's family had ranched in Germany before moving to neighboring Datil in the 1890s.

"Until us, the problem was that no one could run the ranch," Laney said. "Absentee owners would buy the ranch, but they were broke. Most didn't know how to mind the store.

"Our lawyer told us there's not another lending institution in the country that would loan money on this place," he said.

After a year, the Laneys said they concluded that the Diamond Bar didn't have enough water to support nearly 1,200 cows without trashing the streams, even with 15 new tanks. They went to the Forest Service and asked permission to put in 45 tanks.

Four years later, the Forest Service still hadn't decided. Environmental groups such as the Sierra Club Legal Defense Fund and The Wilderness Society were protesting, and the Forest Service was issuing and revising plan after plan.

In late summer 1991, Schock and Sauber were eating a quiet dinner at home when a friend, Rex Johnson, burst in. Johnson, a Forest Service employee, told them he had just gotten an insider tip that a plan to build 37 tanks in the wilderness was a "done deal."

All were outraged, but none more than Schock. An inner-city neighborhood activist when she lived in Tucson, she was hardly the stereotypical wilderness lover. She had fought to stop freeways and to save historic houses and had never read a word of Aldo Leopold. But she knew water issues well, had hiked all over Arizona in her 20s and reacted viscerally at the thought of bulldozers in the wilderness.

In spring 1992, she, Sauber and a handful of others backpacked to the Diamond Bar's East Fork of the Gila River, where dirt banks were falling away and streamsides were as bare as on an irrigation ditch. She was sickened.

In April 1992, on her 40th birthday, she helped Western New Mexico University's biology club organize a Diamond Bar forum. A turbulent crowd of 250 people heard Laney say, "I'll sell, if you've got enough money."

That summer, Bob Ohmart, an Arizona State University riparian expert and cattle industry critic, flew to Silver City at Gila Watch's expense to walk the Diamond Bar's streams. Raised on an eastern New Mexico farm and ranch, owner of 20 cows, and looking like a rancher with tanned skin and close-cropped gray hair, he later said it was the worst overgrazing he'd ever seen.

"Upper Black Canyon was decimated. There was nothing left to erode, the banks were beaten to death. The beaver were so desperate for food that they were eating two-foot diameter cottonwoods."

But the same summer, Forest Service ranger Gerry Engel gave Laney permission to keep his cows in Black Canyon an extra 30 days, saying that "the cattle have already eaten everything. They can't do any more damage." Later, under pressure from environmentalists, Engel backed off, and the cattle left as scheduled.

Last winter, Engel admitted that the Forest Service had mismanaged Black Canyon by allowing overgrazing. He said the agency hadn't wanted to put Laney out of business while it was trying to make long-term decisions about the ranch. He maintained that the grazing hadn't caused any long-term damage since no major floods have come along to wipe out streambanks, although he acknowledged that the grazing is delaying the stream's recovery. Ohmart disagreed, saying that continued grazing means continued erosion, flood damage and bank-cutting.

Engel is a tall, balding, mustached man who uses phrases such as "resource damage" for overgrazed areas, while environmentalists use "nuked."

He says his freedom to act on the Diamond Bar is hampered by congressional grazing guidelines, passed in 1980, that say grazing shouldn't be curtailed simply because land is wilderness. The guidelines also say that improvements such as stock tanks can be built in wilderness "primarily for the purpose of resource protection," not to bring in more cows.

Engel says stock tanks can be justified to protect the streams. Environmental groups say water tanks violate the guidelines, because cutting cows would better protect the resource.

Today, environmentalist and ranching groups are sharpening their pencils for a court fight over how the guidelines should apply to the Diamond Bar, and eventually, every wilderness area in the country.

"We just happen to be at the wrong place at the wrong time," Engel said. "This is kind of all coming to a head."

For Schock, the walls are closing in. Increasingly, agencies are denying her access to documents, particularly those containing "confidential" rancher financial information, and the Forest Service wouldn't let her attend its annual meetings with Laney.

Gov. Bruce King, a public-lands rancher, tried unsuccessfully to veto her from Interior Secretary Babbitt's New Mexico grazing panel, according to two New Mexico environmentalists and a congressional source. King's staff denied that.

Ranchers accuse Schock, who lacks a college degree although she has studied biology and ecology extensively, of having no credentials. She replies that the Ph.D.-laden range scientists at New Mexico State University "are totally out in left field." Forest officials, frequent targets in a "Hoof in Mouth" column in Schock's Cattle Guard newsletter, knock her for personalizing issues. She replies that she only started personalizing issues after a Forest Service official accused her at a public meeting of not telling the truth about conditions on the Diamond Bar when she was reading from a Forest Service document.

In addition to fighting with the Forest Service and ranchers, Schock has taken on other environmentalists.

On the upper Gila River, 25 miles northwest of Silver City, two environmental groups, three ranchers and the Forest Service had spent three years forging a compromise to build pipelines, pump stations and other improvements to move cattle from 32 miles of river bottom without hurting the ranchers' business. The bottom line was $58,000 in federal money to keep rancher Jim Shelley's 77 cows on the land.

But Gila Watch, in Schock's words, put the skids on the plan. Gila Watch and the Greater Gila Biodiversity Project argued the plan violated the National Environmental Policy Act by not looking at the improvements' effects on the uplands.

In late December, the Forest Service withdrew a previous decision approving the plan, thus delaying it until more studies could be done. Acting Gila Forest supervisor Carl Pence admitted his staff had made a mistake by not looking at all the issues. But Howard Smith of one environmental group, Friends of the Gila, accused Schock of posturing.

"She sees it as a war; she wants to change the course of the West," Smith said. "All we want is a springboard, a starting point."

Rick Johnson of The Nature Conservancy, which owns land in the area, blasted Schock for "divisiveness' and said the plan, while not perfect, was a good start. Forest Service officials say an appraiser for The Nature Conservancy has talked to them about buying Shelley's allotment, presumably to run cows, but Johnson won't comment on that.

"The divisiveness is what sets everybody back," said Johnson. "If we're going to get good quality riparian systems, the only way to do it is for everyone to work together."

Later, however, Friends of the Gila's Smith acknowledged that while consensus politics makes good neighbors, it doesn't protect the ecosystem, and in the long run it would be best to get the ranchers out.

"Why is telling the truth considered divisive?" Schock said. "The Nature Conservancy is supporting status quo grazing at a deficit. They're not looking at reality."

Ohmart, Schock's technical adviser, called her a gutsy and dedicated bulldog.

"When she grabs for something, she doesn't stop until she gets what she wants. Sure, she grates people a little bit, but maybe you need to do that."

In a town that includes people she dismisses as "hand-holding, New Age types," Schock proudly wears the hard-liner badge. She likes to say that ranchers should be treated like alcoholics and be forced to confront their addiction to federal subsidies.

While Interior Secretary Bruce Babbitt preaches consensus, Schock says confrontation is healthy. A state Sierra Club executive committee member until her recent resignation, she contends some local environmentalists who won't speak out have no "balls." At times, she'd rather deal with the upfrontness of ranchers.

"What everyone wants is to make everybody happy, and everybody isn't going to be happy over this," she said. "What is an honorable solution? To confront the reality of a situation and deal with it effectively. You can't compromise with reality."

This summer, tension on the Diamond Bar will only increase. While the Forest Service's long-term proposal calls for reducing cattle numbers to as low as 600, the Forest Service is allowing Laney to run 1,000 cows this year while officials prepare the final environmental impact statement. The agency's interim management plan has cattle on every pasture on the allotment, including areas that would normally be rested this year and those, like Black Canyon, that the Forest Service recommended for permanent closure to cows.

The Forest Service operating plan is already showing some holes. In February, 66 bulls had to be removed from the allotment when the grazing along the Gila River's upper East Fork hit critical habitat for the threatened loach minnow "pretty hard," according to Ranger Engel. Gila Watch has brought in a team of hydrologists to conduct comprehensive stream studies to "blow the Forest Service out of the water in court" and prove that current grazing management is not improving the East Fork, according to Schock.

Her group will host a summit of fisheries experts and environmental attorneys in June to devise a legal strategy to "force the Forest Service into compliance with their own recommendations," Schock said. And her cohorts have prodded the Forest Service into a joint willow planting effort on Black Canyon and the East Fork to stabilize collapsing streambanks, although, says Schock, "they'll probably just be lunch for cows."

Tony Davis reports for the Albuquerque Tribune. This story was paid for by the High Country News Research Fund.